This is why your broadband sucks in South Africa

It’s no secret that broadband in South Africa is slower and more expensive than it is in other countries.

On top of that, many DSL users in South Africa complain about poor or degrading connections.

The reasons for South Africa’s poor Internet services are diverse and complex, but some of the biggest contributors are summarised below.

Government interference

South Africa’s government is a major player in South Africa’s telecommunications space.

It owns a majority stake in Telkom, owns backhaul provider Broadband Infraco, and until 2009 it held a 50% stake in Vodacom through Telkom. Government now holds a 13.9% stake in Vodacom.

This means there is a clear conflict of interest, as the government also sets telecommunications regulations policies.

Telkom-only Internet access. In 1996, Telkom tried to convince the South African Telecommunications Regulatory Authority (now part of Icasa) that its state-sanctioned monopoly over voice services should extend to the Internet as well.

Thankfully Telkom’s bid to control the Internet was blocked, with the regulator stating the Internet is an area of competition in terms of the Telecommunications Act.

Telkom-only network infrastructure. The government also stood in the way of infrastructure providers which would compete against Telkom.

This would have effectively blocked the Seacom and EASSy cables from landing in SA.

Matsepe-Casaburri also fought a court case against Altech and others, opposing their right to “self-provision” networks.

The High Court ruled in favour of Altech Autopage Cellular. Matsepe-Casaburri applied for an urgent interdict to stop companies from competing against Telkom, but eventually dropped the case.

Telkom’s protected monopoly

How government failed SA broadband users infographic

Telkom also enjoyed a sanctioned exclusivity period from 1996 until 2002.

Telkom’s protected monopoly formed part of the government’s “managed liberalisation” programme which was set to end in 2002 with the launch of additional network operators.

By 2011, Telkom’s copper local loop should have been unbundled and available for other carriers to use.

In the end, only one additional fixed-line network player was licensed (Neotel), and due to licensing delays it launched in 2006 – four years late.

Former director-general of the Department of Communications Lyndall Shope-Mafole admitted in 2005 that the government protected Telkom’s monopoly after the exclusivity period ended.

“Why were we protecting Telkom? [It was] so that we could get big value for it because it was going [public on the stock market]. It had to do with bringing investors into a company that is South African,” she said.

Telkom listed on the New York Stock Exchange and Johannesburg Securities Exchange in 2003.

Local loop unbundling was never implemented and there are questions about how useful it would be now, considering there are a number of independent players rolling out fibre-to-the-home infrastructure in SA’s wealthier suburbs.

Lack of scale

Moving away from the government’s failures to pure supply and demand – South Africa doesn’t have the buying power or addressable market to drive cheap, fast Internet such as that enjoyed by more developed economies.

South Africa may be more populous than countries such as Australia and New Zealand, but according to a an Ipsos survey from last year only 34% of the roughly 55 million people in SA have Internet access.

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